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The Right Way to Calculate Life Insurance Plans

28/09/2022 |

We are well aware of the importance of life insurance in our lives. From the pure and affordable term insurance policy to the all-encompassing comprehensive insurance plan, we seek to protect our family and achieve the various financial goals we have set for ourselves. The primary reason to buy life insurance is to get life cover so that even when we are no more, our family does not suffer any financial hardships.
 

What are the Types of Life Insurance Plans?
 

A life insurance contract is one in which the insurance company, in consideration of the premiums received from the policyholder, agrees to pay their nominee the sum assured on the policyholder’s death. This basic form is called the term insurance plan. Here are the various types of life insurance plans in India:
 

  • Term insurance: Term insurance is a pure life insurance product that provides a death benefit to the nominee of the policy in case of the unexpected demise of the policyholder. You can choose term insurance to protect your family from any financial distress in case of your death. The premium on a term insurance policy is lesser than other life insurance products, and you must have this policy in your planning mix. If you are looking to safeguard your family financially after your unexpected demise, this is the right plan for you.

  • ULIP plans: These are a systematic method to accumulate wealth through market-linked earnings. The premium is partly allocated for life cover, and the remaining is allocated in funds according to the policyholder’s risk tolerance.

  • Retirement plans: These plans help you in wealth creation and you start receiving regular payouts after a certain period. There are two phases in these plans, the accumulation phase and the vesting phase. During the accumulation phase, you pay premiums and build a corpus whereas, during the vesting phase, you start receiving regular payouts. In case of your unfortunate demise during the accumulation phase, a death benefit is paid to the nominee of the policy.

  • Savings plans: These plans combine an element of savings with life cover to meet your life goals. If you are looking for guaranteed1 returns along with life cover, then this plan is suitable for you.

 

How to Calculate Life Insurance Plans?
 

An insurance plan should be matched with the various personal objectives at different points in our lives. We should also consider the aspirations of our family members and design the financial planning strategy accordingly. Thus the aim should be to achieve comprehensive insurance through an appropriate mix of policies.

Considering inflation and the growth in your earnings, you should arrive at the total coverage you would need. A comprehensive policy combines basic insurance with protection and savings for growth in returns. The premium paid under all life insurance plans is eligible for tax* deduction under Section 80C of the Income Tax Act, and the death benefit received is also exempt under Section 10(10D).
 

We at Tata AIA offer various life insurance calculators that will help you determine the right plan according to your requirements. With our premium calculators, you can calculate the insurance policy premium that you have to pay towards a:
 

You can enter your details in the calculator, and you will get the premium that you have to pay for the plan that you have chosen. This will also help you compare the different plans available and choose the right plan according to your needs.
 

On the Tata AIA website, you will also find life planning tools that will help you decide the plans that you can take according to your specific needs.
 

For example, if you wish to buy a home, you can use the dream home calculator. You have to fill in all the details like your current income, savings, the type of home that you wish to buy, etc. The calculator will calculate the funds that you need and the plans that will help you achieve your goal. Similarly, there are calculators for other life goals like a dream car, your child’s future expenditure, etc.
 

How Can I Purchase a Life Insurance Plan?
 

Many life insurance companies offer a wide variety of comprehensive plans in India. For example, if you visit the Tata AIA life insurance website, you can see several Tata AIA insurance policies for meeting the varied needs of customers. If a comprehensive policy that offers coverage and savings is your requirement, you can choose the appropriate policy features and customise them for your needs. You can choose the top-up option for additional coverage, critical illness and disability riders#, flexible premium payment modes etc.
 

Conclusion
 

Life insurance is a must-have product in every individual’s financial portfolio. You can choose from several life insurance plans besides the basic term insurance so that you can derive protection with savings and growth in returns. You can also use the life insurance calculator to determine the premium you have to pay and analyze different plans. The key is to identify the correct amount of coverage at the right time and choose the policy that matches the financial objective that must be met so that you may have a stress-free life, both during your working life and in retirement.
 

L&C/Advt/2022/Sep/2264

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 

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+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA), Tata AIA Life Insurance is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.
  • IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.

    • Past performance is not indicative of future performance.
    • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
    • Please make your own independent decision after consulting your financial or other professional advisor.

Need more information?

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.